How to Uncover The Perfect Contractor
I have been writing blogs about using "preferred vendors" ie., preferred contractors for several reasons. I have found that I like to stick with my preferred contractors because they are licensed, bonded and guarantee their work, and since I've worked with them for so long, they tend to not only do good work for me, but they put me in as a priority because I pay them for the work they have done timely and honestly. It's important to find, use and refer good contractors - the same way we want them to refer us business.
Whether you are a buy and hold or a fix and flip investor, at some point in your real estate investing career, you are going to need a contractor. Just the thought of finding a contractor gives most investors a headache. Why? It sometimes seems like there are more bad contractors ou there than good. Uncovering the perfect contractor is somewhat akin to searching for the Holy Grail.
But that doesn't mean that a reliable and competent contractor is impossible to find. They are out there waiting for you to call them. In fact, uncovering the perfect contractor is as easy as knowing what questions to ask.
The first question for any contractor is always "Are you licensed, bonded, and insured?" This is proof that your contractor is serious about his business. A contractor who has let his license lapse or is not insured is someone you don't want on your property. He can't pull permits. If anything untoward happens while he is on the job, you are the one who is going to pay for it. While many contractors carr general liability insurance, make sure they also carry workers' compensation insurance. This protects you from liability if a worker is injured on your peroperty. Ask for copies of all licenses and proof of insurance. Many contractors will say they are licensed. Make sure they are!
Ask how long they have been in business in your area. A contractor who has a long history in an area knows the people in the permit office; he is knowledgeable in local code regulations. He'll know who the best suppliers are for your materials and he will have established good relationships with them.
Always ask for written references and check those references! Many people ask for references and then never follow up to make sure the people were satisfied. You want references that specifically relate to the type of work you want done. Someone who put up a lovely brick wall may not be the person to hire to do a chimney. Some contractors will give you addresses of properties they have worked on so you can drive by and see their work. The trick? Some other contractor actually did the work. Talk to the property owner, don't just drive by.
You may also want to talk to other invesors and ask who they use for their work. Sometimes an investor won't want to tell anyone if he finds a good contractor. Others are more willing to share. You can also check with other investors to see if they know or have used a specific contractor. If a contractor has a bad reputation, investors are probably aware of him.
Talk about your specific job. Does the contractor guarantee his work? If so, for how long? You want at least a one-year guarantee on the work from the date of completion. You also want warranties on any materials that are used, if available.
Ask who will be running the job. You might feel very comfortable with the contractor and then end up with a job supervisor who is surly, non-communicative or incompetent. If someone else is supervisitn the job, ask to meet with that person and make sure he is someone you can work with.
Be very clear about how you want the job run. If you want the work area cleaned up every night before the crew leaves, make sure that's in your contract. If you want to be advised of any problems or added expenses, make sure you put in the contract that they need writen permission from you before spending extra time or money. Remember, a contract is an agreement between two parties. You can put whatever you want in the contract. Go over each point with your contractor and make sure he agrees to it and, more importantly, is happy with it. An unhappy contractor is not going to work at his best.
Last but not least, follow your gut. If the contractor checks out but you still don't feel comfortable with him, don't use him. The perfect contractor is someone you want to establish a long-term relationbship with. If you don't trust him or don't feel right working with him, move on to the next person. It may take a few tries, but once you uncover your perfect contractor, your real estate business will have at least one major area that runs smoothly and worry-free.
For more great real estate investing tips for free, check out Cody Sperber's StartClosingDeals 7 video REI training series.
Cody is the founder and CEO of Clever Investor, the industry's premier source of quality real estate investing education. Cody has successfully closed many different types of real estate transactions including wholesale deals, short sales, multi-unit, subject to, lease options and his own proprietary investing strategy, the Reverse Short Sale. As a new investor Cody quickly gained a huge competitive advantage by mastering online lead generation, building one of the most successful real estate investing firms in the Arizona market. His companies have bought and sold hundreds of millions in properties and he has enjoyed several years where he's closed hundreds of real estate transactions. Before real estate Cody served time in the Navy and attended Arizona State. He is now married to his best friend and they have two beautiful children (Hudson and Brynlee). Cody most recently published the Start Closing Deals course on real estate investors.
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